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Fraud could cost Africa its blockchain opportunity

Fraud could cost Africa its blockchain opportunity

Africa has increased efforts to tackle rising levels of fraud perpetrated using blockchain technology.

This is according to Kwame Rugunda, chairman of the Blockchain Association of Uganda, who described blockchain and cryptocurrencies as "critical industries empowering the recently-signed Africa continental free trade area".

From Uganda-based Daniel Leinhardt raising money to create blockchain educational videos and scam alerts to several East African blockchain associations denouncing rising crypto scams and ponzi schemes in the region - the call to avoid these scams is getting louder.

Leinhardt seeks to "stand out and fight against scams and scam lookalikes in the crypto space, especially those that target Africa".

According to a joint statement by the Blockchain Association of Kenya, Blockchain DLT Rwanda Association, Blockchain Tanzania Community, and Blockchain Association of Uganda, the objective is to guide the public on cryptocurrencies and how to differentiate ponzi schemes.

Rugunda added: "There's been a proliferation of these scams and these scams are distorting the correct understanding of cryptocurrencies and the opportunities that crypto enable as well as blockchain technology. We do not like the fact that these scams are distorting these opportunities and confusing people on what cryptocurrencies actually are.

He said the intention is "to be a sober voice to guide from the industry perspective the development of what we believe is a great opportunity in Africa's transformation."

The associations plan to launch a scam alert website that would crowdsource information for the public to learn and seek clarity on any suspected scam project.

They are also working with authorities in their respective countries to support crime fighting initiatives, adding that collaboration between policymakers, government bodies and industry experts from the public and private sectors will go a long way to address crime, advance common causes, development etc.

The organisations cited a suggestion by the President of Sierra Leone, Maada Bio, made at a blockchain conference in July 2019, to raise the collaboration agenda to the African Union (AU) level.

Rugunda said: "The scams are polluting an important nascent industry and this is why we must come together collaboratively - both private and public sectors - which is what we seek to achieve ultimately."

"(This is) In order to refuse the pollution from coming in, the contamination, to protect the industry, to optimise the value and opportunity it can enable. These technologies, when well-harnessed, can do a lot for Africa, taking the African continent to the next level but we must guard and ensure that there is no premature abortion of the opportunities hence we want to nip it in the bud which is part of the reason why we are coming out strongly to be able to fight it off."

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